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The greater influence of right-side digits...

If true, this really means that a lot of stores that advertise $1.99 things are way off base. That sounds very expensive. They should be advertising $2.01 instead. That sounds cheaper. Is this true?

Well, we all spend time peering at gas station prices as we drive by and having to make a split second decision whether we want to stop at Exxon selling gas at $2.81 and a no-name brand selling for $2.59. Well, it is a truism that if you are the first gas station on the road and you advertise gas at $2.71, everybody will pass you by in anticipation that they will see a lower price and end up buying at the third station at $2.72 because the second one is $2.98.

Wise.

Sales Prices: How Right Digits Affect Perception of Discounts

Science Daily — The amount of the discount may be less important than the numerical value of the farthest right digit, explains a new study from the Journal of Consumer Research. Keith S. Coulter (Clark University) and Robin A. Coulter (University of Connecticut) are the first to identify a visual distortion effect that may influence how consumers look at sale prices.

The researchers show that "right-digit effect" influences consumer perception of sale prices. When the right digits are small, people perceive the discount to be larger than when the right digits are large. In other words, an item on sale for $211 from the original price of $222 is thought to be a better deal than an item on sale for $188 from an original price of $199, even though both discounts are $11.

That's wierd. I always thought it was the other way around. It may have to do with larger ticket items, in which it would then make sense. But with single digit dollar amounts ($0-$9.99), I think the left digit placeholder carries more weight.

That's wierd. I always thought it was the other way around. It may have to do with larger ticket items, in which it would then make sense. But with single digit dollar amounts ($0-$9.99), I think the left digit placeholder carries more weight.

I agree. I think that the left side digits affect me more. I automatically round up with the right side digits.